New estimates cut farm bill savings

Writing a new farm bill just got harder as well on Friday as the Congressional Budget Office released new estimates substantially downgrading the promised savings from House and Senate proposals last summer.

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CBO says the Senate-passed farm bill will save only $13.1 billion over 10 years, compared with a promised $23.1 billion last July. The House Agriculture Committee plan, which never made it to the floor, fares better but comes down as well from $35.1 billion to $26.6 billion in 10 year savings.

Long term farm bill estimates are notoriously fickle given the number of moving pieces in any calculation. But the percentage change, especially for the Senate, is striking and virtually erases any meaningful savings from the food stamp program.

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) has talked optimistically of reviving her bill early this spring, but based on the CBO numbers, the Senate’s savings are just half of what the House has proposed.

“CBO regularly adjusts their formulas for calculating savings. The Committee will be able to achieve the savings needed, once it passes the new version of the Farm Bill,” said Ben Becker, a spokesman for Senate committee.

In core farm support programs, both bills pay a price for market changes out of Congress’s control, but the estimates point up two trouble spots.

In the case of the Senate, costs attributed to its ambitious new Agriculture Risk Coverage program are up because CBO says that higher commodity prices have increased the expense of promised revenue guarantees for farmers. ARC’s 10-year cost is now pegged at almost $31 billion compared to $28.5 billion last July.

The House plan has problems too with its Supplemental Coverage Option, or SCO, in the crop insurance title. Industry analysts have warned that this program — a sleeper in the larger farm bill debate — has the risk of ballooning because the House makes it easier to enroll under favorable terms. The new CBO estimates bear this out, showing that the 10 year costs for SCO would be as high as $5.26 billion compared to just under $4 billion last July.